Japan Financial Services Agency (FSA) has proposed a radical reclassification of cryptocurrencies which would erase a path for the launch of negotiated funds in exchange for crypto (ETF) and would introduce a stable tax of 20% on the income of digital assets.
The proposal, introduced Tuesday, suggests recognizing the crypto as “financial products” within the framework of the Financial Instruments and Exchange Act (FIEA), the same regulatory framework that governs traditional securities and financial products.
The proposed reclassification could also move the current progressive tax system of Japan, which tax crypto gains at rates of up to 55%, to 20% uniform, reflecting the treatment of shares. This change could make the investment in cryptography more attractive for retail stakeholders and institutions.
The proposed change is part of the broader strategy of the “new capitalism” of the Japanese government, which seeks to position the country as an economy led by investments.
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Japan exceeds 12 million active cryptography accounts
This decision comes in the midst of growing interest in the crypto as a legitimate investment actor. According to the FSA, more than 12 million national cryptography accounts were active in January 2025, with assets held on platforms exceeding 5 billions of Japanese yen (around $ 34 billion).
In the proposal, FAS also revealed that possession of cryptography is now exceeding participation in certain traditional financial products, such as FX and business bonds, especially among the retail investors in technology.
The proposal also reacts to the sharp increase in institutional engagement in the world. The FSA has cited data showing more than 1,200 financial institutions, including American and Goldman Sachs pension funds, now hold Bitcoin ETF from the American list.
Japanese regulators aim to support similar developments at the national level, especially since global fund flows in the crypto continue to develop.
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SMBC, Ava Labs Explore Stablecoins in Japan
In April, Sumitomo Mitsui Financial Group (SMBC), Tis Inc., Ava Labs and Fireblocks signed a memorandum of understanding to explore the marketing of stablecoins in Japan. Collaboration will focus on the issuance of stablescoins set both in the US dollar and the Japanese yen.
The group also plans to examine the use of stablescoins to settle real assets in tokenized such as shares, bonds and real estate.
In March, Japan issued its first license allowing a company to deal with stablescoins in SBI VC Trade, a subsidiary of the local financial conglomerate SBI, which said that it was preparing to support the Circle USDC (USDC).
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